He expressed once more the UK’s commitment to CCS as a part of the solution to cut the CO2 emissions. He stressed that there was a window of opportunity for exports of CCS technology now as China is building more and more power plants which will potentially need CCS infrastructure.

UK determination to get into the commercial phase in CCS faces significant barriers such as the low electricity demand and the low price of CO2 emission allowances in the EU which deter investors. The price of emission allowances in the EU ETS is around €15 wheareas only a price reaching at least €50 would encourage CCS investors.

The UK has already largely committed to CCS and plans to fund four demonstration CCS projects by 2020. 

But “there is not enough certainty to give investors confidence,” the Minister said, considering the current UK Climate Change Levy not sufficient to spur investments in CCS technology. He, along with environment ministers from France and Germany, have therefore called for raising the EU’s 2020 greenhouse gas emission target from 20% to 30% (on 1990).

“Although our Climate Change Levy can help our own first-mover advantage, it is not a substitute in the long run for a greater contribution at an EU level,” he added. Proposals for a reform of the Carbon Change Levy will come out this autumn in order to make it more of an incentive. In addition, Huhne supports strong Emission Performance Standards, a regulatory framework which requires big scale investments in the short term.  

”New incentive measures are increasingly necessary to turn these commitments to CCS into reality,” says Eivind Hoff from Bellona. ”An EPS could act as a trigger for large scale investments and facilitate the switch from the demonstration phase to the commercial phase.” he added.

Read Chris Huhne’s speech to the Carbon show here